By Jorge Casuso

September 7, 2022 -- The owners and managers of two Santa Monica apartment buildings have been placed in a 12-month diversion program after the City filed a lawsuit alleging multiple illegal acts, City officials said last week.

The defendants -- Adam Shekhter; MySuite, LLC.; 1238 10th Street, LLC., and 1433 Euclid Street, LLC. -- are required to pay $80,000 to the City of Santa Monica for tenant protection enforcement and outreach.

As part of the diversion approved by a California Superior Court judge on July 29, the defendants also will pay $20,000 to a former tenant and $2,000 to a current tenant, according to the City Attorney's Office.

In its complaint, the City alleged the defendants engaged in tenant harassment, public nuisance and zoning violations.

The complaint alleges the defendants "operated an illegal group residential use by renting apartment units bedroom-by-bedroom to tenants on separate leases," the City Attorneys office said.

It also alleges the defendants "created a public nuisance by providing substandard housing that lacked a kitchen at the 1238 10th Street property."

In addition, the defendants "engaged in tenant harassment by attempting to influence a tenant at 1238 10th Street and a tenant at 1433 Euclid Street to vacate their units through fraud, intimidation, or coercion," according to the complaint.

David J. Carroll, an attorney for the defendants, said his clients disputed the City’s allegations and pleaded not guilty to all charges in the complaint.

"Rather than spend substantial funds litigating the case through trial, however, they agreed to a diversion program that upon successful completion will result in a full dismissal of all charges anyway," Carroll said.

"Our clients look forward to moving past this matter and continuing to build their business,” said Carroll, a partner with Ellis George Cipollone.

If the defendants fail to comply with the terms of diversion, the court is authorized to terminate diversion and resume the criminal proceedings, City officials said.